When it comes to deciphering an adequate bank Forex trading system, the prime focus always has to be on fundamental analysis. Economic news events and Central Bank declarations need to be given examination as currency behaviour are dependent on them totally.
In many ways, experts point out that bank Forex trading systems involve very little indicators. This makes the charts clearer to read and easy to make decisions. Surprisingly, some bank trading systems involve no usage of indicators at all. They just rely on Price Action trading, basing trading operations upon the volume of demand and supply.
Whatever be the nature of a banks Forex trading system, the constant thing which one will find is simply focus on market variables which actually matter. Here’s a post which explains the Do’s and Don’ts’ when using a banker’s FX trading system.
The Don’ts’ – (The Paralysis of Analysis)
Continuing from the top, the principle of a reliable bank Forex trading system is easy interpretation. However, most traders make it a habit of over-cluttering their trading charts. Endless incorporation of technical tools and indicators make decision making difficult.
Experts believe that one should always use technical tools which make trading easy and accurate. If one is able to achieve perfection with just 2 indicators, then one should stick to that system. There is no point of blocking their price analysis vision or complicating their analysis of market direction movement.
The Do’s – (Assertive Attitude and Apt Aptitude)
Examining the Trend and Momentum:
Traders wanting to use banks Forex trading systems need to examine the market trend and momentum before entering trades.
To view the existing market trend, bank traders use either medium to long term Exponential Moving Averages or a Trend Channel. As an alternative to technical analysis, bank traders also refer to fundamental market sources and factors which determine trend movements.
For viewing the momentum, traders can use Candlesticks
Determining the Patterns:
Honestly speaking, there are numerous patterns occurring around the Forex market. However, bank traders don’t randomly enter trades such as a scalper. They make their time conducting deeper market research and only go after the patterns which have resisted the test of time. To interpret the market patterns, one can make use of candlestick patterns and thoroughly follow one’s graphical chart patterns. Another thing being, successful bank traders use their systems to only go after confluence areas, simply because patterns in those regions have more value.
Evaluating the Support and Resistance:
Support and Resistance are one of the key factors in deciding the crucial market movements. Traders using a bank Forex trading system try and capitalize on the battle which happens between the Support/resistance and trend/momentum. Those areas usually consist of interesting potential opportunities.
These are the chief hallmarks of profitable bank Forex trading systems. Analyzing these aspects of the market, bank traders make their bucks.
Newbies wanting to use a similar bank Forex trading system will have to keep these Do’s and Don’ts’ in mind when trading. Plus, they also need to stick to one system and develop their skills. For a market which is as huge as the currency exchange venture, trading scope will come in plenty. All one has to do is patiently wait for the right one and go after it.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.